This paper examines rapidly increasing bilateral intra-industry trade (IIT) in the automobile industry form 1990 to 2007, and we analyze the determinants of the trade patterns of vertical and horizontal.We investigate the determinants of IIT, emphasizing between height technology and low technology countries classified by patent data, and we develops an analytically solvable partial equilibrium model of out sighting to investigate wage, investment costs, multinational activities and intra-industrial trade.We investigate the relation of outsourcing of production process and trade using Grossman and Helpman model. In theoretical investigation, production cost, wage or interest rate, is necessary to determine intra-industrial trade.The statistical analysis based on the trade data presents interesting results of IIT. Bilateral differences in technology, wage, GDP, distance, Protection of patent right turn out to be correlated with vertical intra-industry trade.
